THE LIQUOR PRODUCTS ACT, ACT 60 OF 1989

REGULATORY FRAMEWORK AND AGREEMENTS THAT RELATE TO TRADE IN WINE

SCOPE of the LP Act?

ALL liquor products with an alcohol percentage of more than 1 percent, except for medicine and beer.

NOTE:

LP Act currently under review to INCLUDE beer, ale, traditional African beer and other fermented beverages and alignment with 0.5 percent of Foodstuffs, Cosmetics and Disinfectants Act

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REGULATORY FRAMEWORK

Liquor Products Act, Act 60 of 1989 Export country legislation - compliance to EACH export

destination before wine can be exported International bodies like the OIV (International Wine

Office in Paris, France) and the WWTG (World Wine Trade Group) play an important role in setting international guidelines and enhancing trade

Bi-lateral and multilateral agreements with the European Union (EPA agreement on GIs) impact trade

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SOUTH AFRICAS AGRICULTURAL EXPORTS: MAJOR PRODUCTS

2014

Chart1Citrus fruit, fresh or driedWineGrapes, fresh or driedApples, pears and quinces, fresh or driedMaizeSugarWoolFruit and vegetable juicesPreserved fruit and nutsOther14.24638871529.85291860957.71764571776.98280333786.29230881794.24427285923.49283770073.35706350772.342276722141.4714840124Internat. (84-88)Table 85 - Value of the Southern African Customs Union (SACU) exports of agricultural productsProduct200020012002200320042005200620072008200920102011201220132014120151R1 000Sugar1 8564442 7027942 2804461 7868771 5906691 9917553 3850452 7036763 2295723 8727532 1617381 4271511 6046793,019,5723 4506122,009,015Wine1 6908961 9630363 0001443 1482953 4351063 7917343 5499584 7258376 1920145 9904235 7130425 4596015 9836907,933,0678 0104658 943425Citrus fruit, fresh or dried1 4917801 7912132 2742762 5956752 9635933 1814793 4153114 3322305 5023365 3753686 6164086 9358797 3890599,334,64511 58237513 884811Grapes, fresh or dried1 2661201 3272161 6163371 6574162 0499472 1038612 0161512 6093643 0802863 4382693 6923553 4379904 0794504,981,7656 2744797 538166Preserved fruit and nuts8604169896881 3522101 4261751 3366031 1525441 2190241 2837381 4906491 5967121 5317451 3647331 5285921,777,5361 9042812 437601Apples, pears and quinces, fresh or dried7032568341681 2481771 4382481 6789251 5419961 5378012 3265922 8934063 1147902 9862513 3217243 9051915,926,5185 6770496 924805Fruit and vegetable juices6467316503209647417939246167828180161 0055679606371 4316911 4319171 5101241 6681931 8712692,280,5752 7293073 762313Cigars, cheroots, cigarillos and cigarettes547178642162522440270013274455412301535736507145521623677967737506703333928434749,0708721921 925942Maize5025756920611 4178411 0702427257001 6451549650832297134 3332333 7883242 2286205 8791363 2589656,197,6825 1156742 705320Undenatured ethyl alcohol3780335378136747494721114831861 1319558060808337939670249208449273729148731 1755621,253,4081 4815521 556090Wool3516134145907673556413285767665789407567251 1286701 2352641 2900361 3178612 1629562 3987992,943,2462 8396923 285902Food preparations2382682846483631312743732340772667973712985250016820537803398783161 1734671 2384121,380,3151 8434802 570374Apricots, cherries, peaches, plums and sloes, fresh or dried2093792523193047603180573393713145622500543536114804336435126397727859987791681,061,3201 4722381 518531Tobacco20487952814933476930016826900622982422575029212428037633747541154716250212253469,26561215102477Dates, pineapples, avocados, figs, guavas, mangoes, fresh or dried180861169155280599290335222198317002218288313555400101320714443967325607681343878,6061 1605351 31602785Raw skins of sheep and lambs1802892937374982484089883744333078613047473953904051973155424028035803325449111,665,141815604816154Undenatured ethyl alcohol (beverages)1677853197882833952214222055382754373297764256995704316254646632658127798606981,420,9981 2244231 556090Sugar confectionary16448118770318200111169174144871679299796377128036173694171722230128246079302,388382752996673Other meat and edible meat offal158460333776341762261088178747820642666963889124862234365744454331323272724945,62878741225511Raw hides and skins of bovine17520220190617426817928917896114005197993137789129228142255193464188454286130534,185580601613033Other3 7776214 9508107 0062455 5869634 8485425 7707495 6274656 09698412 50460112 18647212 72686313 14605916 27777918,737,75623 74316144 213320Total15 75226720 06705225 88789423 25267822 65674926 14124926 97754530 66683746 94377747 45944446 40017450 81322255 18799372 49268681 300428108 901580Source: Customs and Excise1 PreliminaryTable 87 - Value of the Southern African Customs Union (SACU) imports of agricultural productsProduct20002001200220032004200520062007200820092010201120122013201420151R'000Rice9390299536201 2539271 1843261 3335341 4595731 6788472 1228503 8698693 7828043 0288313 6871645 6236326 2802334,560,3825 565056Wheat6338503822639710908550171 2717341 1547121 0134141 8350033 6121292 3379972 0180714 3322313 9524394 0236745,514,8146 044244Whiskies, rum, gin and other alcoholic beverages21475712825759823474043123014263123946211260426122766155265170310112233179,348181730Soya-bean oil-cake521862239514371774912666445396957768750051 4725922 3583679375032 0131072 7126862 1772612 0756841,720,6811 767311Bread mixtures, jellie powders and other foodpreparations3448114558234754824420814860576209007918991 0232311 2380271 0279551 0156971 2074621 4053621 8650662,043,3892 257883Palm oil3233664270867584287333037889896644227919471 3803692 4282591 9334672 1839472 9757813 3425313 0000433,834,0163 181271Sunflower- and cotton-seed oil3138333981022144492038073955761603824879249088714648757545047864068921872 0452321 5151371,448,4311 158581Meat and edible offal of poultry3040723192573713015511057270959383081 2407301 6022511 5788761 5580831 7542332 7340003 5208693 8994724,067,9604 654490Tobacco3967394546296571055814847388714928005566215726388619951 5994401 2493301 2350321 1703459296181,600,8031 684277Cotton230247407781633177576879757627423671354808381503430407397369363274738099556594684061526,562359390Maize2158831396791 117243494560476396497907623431 46501822695318411790920235609590162111563393,5981 970018Preparations used in animal feeding2085832206142277572440042774583010013565854408685921225672245956488059149412041 0632761,333,8451 730300Coffee184843141822192133174990170401241310314945341388588507418027476619675675714784736305912,1291 179187Hides and skins (bovine)1736932139581441021947961494875423212542723394034055844317153191825301567,861138067Barley153876187579317380132563670131188425928147259165002524581091502313854455894708230,75327625587Malt298029360697264998349452976712125212306494390444460472255623265350372038351065337,445473303Milk and cream1425821178471598479285940207178345132441362910193813111617167510214085355977269980419,307390109Meat of sheep or goats139408102743649806508687421131739232410232455258183120546113380133346917656653663,535321570Peptones, other protein substances and hide powder136306160891173817113442138465152754165641199007298245200209226672235984287554399495453,658538284Dried leguminous vegetables12929098022239913326424182556173626282408486478535141569616574711592166899785646951728,308606984Other4 5915055 1975086 6277866 2928187 5401388 16629310 33920214 10366118 26473117 96131817 47244420 84982324 78947129 12931830,600,89668 181997Total9 64411810 70435215 16261513 91046716 41549716 28641820 58846829 30447338 42746035 03920734 62678244 92639753 07105557 30743361 037721102 660307Source: Customs and Excise1 PreliminarySheet1Citrus fruit, fresh or dried11 582375Wine8 010465Grapes, fresh or dried6 274479Apples, pears and quinces, fresh or dried5 677049Maize5 115674Sugar3 450612Wool2 839692Fruit and vegetable juices2 729307Preserved fruit and nuts1 904281Food preparations1 843480Undenatured ethyl alcohol1 481552Apricots, cherries, peaches, plums and sloes, fresh or dried1 472238Undenatured ethyl alcohol (beverages)1 224423Dates, pineapples, avocados, figs, guavas, mangoes, fresh or dried1 160535Cigars, cheroots, cigarillos and cigarettes872192Raw skins of sheep and lambs815604Raw hides and skins of bovine580601Sugar confectionary382752Other meat and edible meat offal78741Tobacco61215Other23 743161Total57 557267Citrus fruit, fresh or dried11 582375Wine8 010465Grapes, fresh or dried6 274479Apples, pears and quinces, fresh or dried5 677049Maize5 115674Sugar3 450612Wool2 839692Fruit and vegetable juices2 729307Preserved fruit and nuts1 904281Sheet3Citrus fruit, fresh or dried11 58237514.246388715281,300,428Wine8 0104659.8529186095Grapes, fresh or dried6 2744797.7176457177Apples, pears and quinces, fresh or dried5 6770496.9828033378Maize5 1156746.2923088179Sugar3 4506124.2442728592Wool2 8396923.4928377007Fruit and vegetable juices2 7293073.3570635077Preserved fruit and nuts1 9042812.3422767221Other33 71649441.4714840124100Sheet4Citrus fruit, fresh or dried14.2Wine9.9Grapes, fresh or dried7.7Apples, pears and quinces, fresh or dried7.0Maize6.3Sugar4.2Wool3.5Fruit and vegetable juices3.4Preserved fruit and nuts2.3Other41.5Sheet4

SOUTH AFRICAS WINE EXPORTS (HS 2204)Major Destinations

2014

EU 2754%

Canada5%

China and HK2%

USA5%

Russia2%

SADC12%

Rest of Africa3%

Other17%

Source: SARS

Chart1EU 27CanadaChina and HKUSARussiaSADCRest of AfricaOtherEast498446921643022810692591575Sheet1EU 27CanadaChina and HKUSARussiaSADCRest of AfricaOtherEast498446921643022810692591575

SOUTH AFRICAS WINE EXPORTS(HS 2204)

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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Source: SARS

TRADE AGREEMENTS: SACU EU ECONOMIC PARTNERSHIP AGREEMENTImplemented on 1 November 2016 - Products include: Sugar: zero tariff quota of 150 000 ton. Wine: zero tariff quota increased from 50 to 110 million litre/year Ethanol: zero tariff quota of 80 000 ton Oranges: duty free quota free time period expanded from 1

October to 15 November Other: Cut flowers, table grapes, various fruit at zero tariff, also

improved canned fruit quota, fruit juices, quotas for yeasts and reduced tariffs for various processed agricultural products.

Concern: Various dairy products and meat cannot be exported due to SPS challenges.

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ROLE OF WINE AND SPIRIT BOARD IN THE PROTECTION OF GIS UNDER EPA STATUTORY Body establish under section 2 of LPA Administers Wine of Origin Scheme, IPW (sustainable

production of wine) and Estate Brandy Scheme Reports directly to the Minister of DAFF- advisory body Members of the Board is appointed by the Minister Control and protection of GIs adds value to wine

premium wine Administration of GI protection as required by the EPA

agreement

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VERIFICATION OF FOLLOWING 3 CLAIMS FORMS BASIS OF GI PROTECTIONGuarantees the following claims on wine labels:

Origin (STELLENBOSCH OR PAARL)

Vintage (YEAR 2011)

Cultivar (CABERNET SAUVIGNON)

TYPICITY AND QUALITY OF WINE VARIETIES FORM BASIS OF GI WINES Tasting panels taste wine certified for a GI in terms of the

requirements of the WINE OF ORIGIN Scheme Taste for cultivar/terroir (origin/area) typicity Ensure quality and safety compliance (healthy/drinkable)

WHY A WINE OF ORIGIN SYSTEM?

To prevent fraud

International requirement in terms of the EPA agreement

Chardonnay?

SA TRADE AGREEMENTS/NEGOTIATIONSWorld Trade Organization (WTO)Agreement on Agriculture (Rules for tariffs & subsidies)SPS Agreement (Protection of human, animal & plant health)TRIPS Agreements (Protection of intellectual property such as

trademarks & GIs)TBT Agreement (Technical Barriers to Trade)DSU (Settlement of Disputes)Various other agreements

Doha Development Agenda initiated in 2001 to continue the reform process, amongst others in agriculture, is seemingly stuck with very limited movement since 2008. At the 2015 Ministerial in Nairobi, Kenya, the elimination of export subsidies was decided.

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REGIONAL AND BILATERAL AGREEMENTSSouthern African Customs Union (SACU) (from 1910, latest

revision in 2002) free movement of goods, trade essentially free with some interventions, common customs pool, joint negotiations of trade agreements. Countries involved are Botswana, Namibia, Lesotho & Swaziland.

Southern African Development Community (SADC) Free Trade Agreement (FTA), substantially all goods free, with the exception of sugar (Sugar Protocol), 12 members participate in FTA, currently some exceptions in free trade of goods due to economic conditions: fee exceptions for countries such as Zimbabwe or Malawi have requested to increase tariffs due to economic difficulties. Exports to SADC countries major source of export growth for agricultural products.

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EFTA AND MERCOSUR AGREEMENT

EFTA (European Free Trade Association) FTA, SACU with Switzerland, Lichtenstein, Norway & Iceland, FTA, Review of agreement currently underway.

Mercosur Agreement SACU with Brazil, Argentina, Uruguay, Paraguay (Venezuela not part of agreement): Preferential agreement, only a few tariff lines to be liberated, implementation from 1 April 2016.

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CURRENT NEGOTIATIONSTripartite Agreement, SADC, Comesa & EAC - 26

countries with the intention to create an FTA, envisaged conclusion of negotiations in 2017. Regional Integration is a priority agenda. SA is engaged in the Tripartite FTA negotiations between the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC). The Agreement was launched on 10 June 2015. Outstanding work includes concluding on product specific rules of origin as well as the conclusion of tariff negotiations between the regional groupings and/or individual members of the grouping.

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CURRENT NEGOTIATIONSIndia (Preferential Trade Agreement) SACU, India,

negotiations are continueCFA (Continental Free Trade Agreement) Includes all

countries on the continent, negotiations were initiated in 2015, substantial work remains to be done. One of the objectives of the CFTA is to overcome dependence on exportation of primary products. It is also an objective to resolve the challenges of multiple and overlapping membership and expedite the regional and continental integration processes.

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COMESA-EAC-SADC TRIPARTITE FTA Three Regional Economic Communities and members of Tripartite FTAs

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UNILATERAL PREFERENCESUnilateral PreferencesAGOA (African Growth and Opportunity Act) Unilateral

preferences offered by the USA to African countries on certain products. For South Africa this includes tariff preferences on wine, certain fresh fruits and nuts.GSP (General System of Preferences) Certain tariff

preferences offered by developed countries to developing countries. South Africa benefits from GSP in countries such as Japan and Canada. GSP plays a fairly small role in RSA external trade for agricultural products.

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WORLD WINE TRADE GROUP (WWTG) The WWTG is an informal group of wine producing countries

with the following objectives: Facilitate the trade in wine Reduce barriers in the wine trade Share information/collaborate on trade and wine issues Share and exchange laws & regulations related to wine

making practices and wine labelling

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WORLD WINE TRADE GROUP Benefits?

World Wine Trade Group (Australia, New Zealand, Georgia, South Africa, Canada, USA, Chile & Argentina) the objective to facilitate trade in wine and remove obstacles in the trade of wine. The agreements do not address tariffs. The group has achieved major successes in addressing trade barriers for wine and has a very active outreach program with APEC economies (Asian Pacific Economic Cooperation). Agreement on Mutual Acceptance of Oenological Practices Agreement on Requirements for Wine LabelingMoU on Certification (still to be signed by South Africa)Protocol on Labeling (still to be signed by South Africa)

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SUMMARYMANY constraints remain when exporting wine International wine arena is complicated Challenge to remain informed of ever changing export

country and certification requirements change daily Difficult to remain competitive with Duty Free

agreements on wine being agreed between EU/ASIA with our direct competition: Australia, USA and Chile

SA should focus on making QUALITY wine and selling in the premium wine category

Despite the constraints - SA remains under the top 10 wine producers and exporters in the world!!

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THANK YOU !!

THE LIQUOR PRODUCTS ACT, ACT 60 OF 1989SCOPE of the LP Act?REGULATORY FRAMEWORKSOUTH AFRICAS AGRICULTURAL EXPORTS: MAJOR PRODUCTS2014SOUTH AFRICAS WINE EXPORTS (HS 2204)Major Destinations2014SOUTH AFRICAS WINE EXPORTS(HS 2204)R- MILLIONTRADE AGREEMENTS: SACU EU ECONOMIC PARTNERSHIP AGREEMENTROLE OF WINE AND SPIRIT BOARD IN THE PROTECTION OF GIS UNDER EPAVERIFICATION OF FOLLOWING 3 CLAIMS FORMS BASIS OF GI PROTECTIONTYPICITY AND QUALITY OF WINE VARIETIES FORM BASIS OF GI WINESWHY A WINE OF ORIGIN SYSTEM?SA TRADE AGREEMENTS/NEGOTIATIONSREGIONAL AND BILATERAL AGREEMENTSEFTA AND MERCOSUR AGREEMENTCURRENT NEGOTIATIONSCURRENT NEGOTIATIONSCOMESA-EAC-SADC TRIPARTITE FTAUNILATERAL PREFERENCESWORLD WINE TRADE GROUP (WWTG)WORLD WINE TRADE GROUP Benefits?SUMMARYTHANK YOU !!